OPENING CALL

As the July jobs report looms, investors are confronting two big questions: What if the economy isn't so strong after all, and what if the epic tech rally went too far?

The employment report is expected to show a slight slowdown in hiring, and unemployment holding steady.

While the nonfarm payrolls report is often a big deal, this month's could take on outsize significance, given fresh jitters about economic resilience after weak data on Thursday.

That data, plus disappointing tech earnings, have sparked a global stock selloff.

Chip stocks were deep in the red from Tokyo to Amsterdam after Intel unveiled drastic turnaround plans.

Amazon's big AI spending didn't help the mood.

Investors flocked to assets seen as safe, including U.S. Treasurys and gold.

In recent trading

Stock futures were weaker, with contracts on the Nasdaq-100 down more than 1.5%.

Tech stocks led declines. Intel shares fell more than 20% premarket, while Amazon lost 10%.

Treasury yields dropped further. The yield on the 10-year note fell further below 4%.

Gold climbed. Continuously traded contracts rose 1% to top $2,500 a troy ounce, on course for a new closing record.

Overseas stocks slid. Japan's Nikkei 225 ended down 5.8% while European benchmarks saw more moderate declines.

Other Premarket Movers

Block's earnings topped forecasts. Shares rose 6%.

Coinbase swung to a quarterly profit, while revenue doubled from a year earlier. Shares rose 1%.

DoorDash posted double-digit revenue growth and narrowed its loss in the second quarter. Shares rose 11%.

Snap missed expectations and guidance was at the low end of forecasts. Shares fell 17%.

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MARKET WRAPS

Forex:

The dollar fell as investors looked ahead to nonfarm payrolls.

Commerzbank said we got a small taste of the effect of the Fed's focus shifting more to employment on Thursday with a further contraction in manufacturing activity and employment in July.

Sterling's losses could be limited, as the BOE will likely only cut rates gradually, Commerzbank said.

Bonds:

The bond market backdrop remains constructive with macro data softening, central bank speculation intensifying and risk assets struggling, Commerzbank Research said.

While the labor market remains robust, most indicators are pointing to a weakening trend, he says.

Societe Generale said the current sharp rally in global bonds and the increased pricing of interest-rate cuts show that investors are nervous about a more meaningful slowdown, although the reaction could be overdone.

It remains neutral on duration and continues to favor yield-curve steepener trades.

Energy:

Oil prices were rising after slipping in the previous session as traders weigh geopolitical risks and demand concerns.

Commodities came under pressure following weaker-than-expected manufacturing activity data on Thursday, which only added to worries over the demand outlook in China.

Still, fears that a wider conflict in the Middle East could disrupt supplies are leading traders to take the view that prices will rise, according to ANZ.

"More than 300,000 Brent call option contracts were bought, the highest volume since April."

Investec said OPEC+ member states might decide to delay the phase-out of voluntary output curbs if demand continues to be soft.

Metals:

Gold futures hit a record high.

The market is positioning itself long gold ahead of nonfarm payroll data, Pepperstone said.

The market has ramped up expectations of the Fed easing monetary policy to the point that debate is now around whether it frontloads interest-rate cuts in September or maintains a slow and steady approach to easing.

A weak payrolls report--particularly if the unemployment rate ticks up to 4.2% or above--will see swaps pricing move even closer to a 50 basis point cut in September, in turn taking Treasury yields lower and gold up to a new all-time high, Pepperstone added.


TODAY'S TOP HEADLINES


Big Tech's AI Race Has One Main Winner: Nvidia

It's Nvidia's market. Everyone else just lives in it-though not nearly as well.

The superstar chip maker hasn't participated in the latest round of earnings reports for the June quarter-its announcement will come later, as its fiscal quarter just ended on July 28. But the most dominant news out of those reports over the last two weeks has been great news for Nvidia, as Amazon.com, Google, Microsoft and Meta Platforms have all reported significant jumps in capital spending that is mostly going toward data centers and Nvidia's artificial-intelligence systems which power those facilities.


Judge Overturns $4.7 Billion 'Sunday Ticket' Verdict Against the NFL

An antitrust verdict against the National Football League that resulted in a $4.7 billion award in damages to customers of the league's "Sunday Ticket" television package was overturned by the judge in the case.

U.S. District Judge Philip Gutierrez tossed both the damages and the class liability in the class-action suit in a ruling issued Thursday afternoon.


Exxon and Chevron Face High Bar for Earnings

Big oil companies haven't been getting rewarded by the stock market in recent weeks-even when they post good quarterly results. The latest example was Shell, whose stronger-than-expected earnings on Thursday morning led to a 0.5% decline for the stock. That's bad news for Exxon Mobil and Chevron, both of which are set to report second quarter earnings on Friday morning.

The overarching problem is the path of oil prices. Crude has been relatively weak lately, largely because demand has been tepid in China and elsewhere. While geopolitical risks in the Middle East have kept prices above $75 per barrel, they are still well below the $90 level where they were trading in April.


Energy, Climate and AI Bets Are Powering Europe's Venture Sector

Venture capitalists' appetite for energy and artificial-intelligence investments is putting Europe's venture sector on a hot streak.

European governments' focus on energy security amid heightened geopolitical tensions has helped spur a capital rush, investors and analysts say. That coupled with the emergence of Europe-based AI startups, which can be less expensive than their U.S. counterparts, is also drawing investors.


What 100 Years of Rate Cuts Says Happens Next

The Federal Reserve appears to be gearing up for a September rate cut. A century worth of rate-cut history shows it's good news for the stocks-as long as the economy stays strong.

The Fed, which concluded its July meeting on Wednesday, opted not to cut its benchmark federal-funds rate this month, but added hints the rate could move at central bank's next regular gathering on September 17-18.


Trump Floats End to Taxes on Social Security Benefits

WASHINGTON-If there were a world record for tax cuts per word in a social-media post, Donald Trump might have set it this week.

"Seniors should not pay tax on Social Security!" the Republican presidential nominee posted in all-caps on his Truth Social network on Wednesday before repeating the idea at a Pennsylvania rally that night. Teaming it with another floated idea, he followed up Thursday: "No tax on Social Security for seniors, no tax on tips!"


Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

ATCO 2Q

Brookfield Renewable Partners 2Q

Canadian Utilities 2Q

Enbridge 2Q

Ensign Energy Services 2Q

Foraco International 2Q

Imperial Oil 2Q

Magna International 2Q

TELUS 2Q

TELUS International 2Q

Economic Calendar (ET):

None Scheduled.

Stocks to Watch:

Black Diamond Group 2Q EPS C$0.12; 2Q Rev C$95.5M

CT REIT 2Q EPS C$0.35; 2Q Net C$103.3M; 2Q Rev C$144.4

Definity Financial 2Q EPS C$0.89; Appoints Sonia Baxendale to Its Board of Directors.

Elevation Gold Obtains Initial Order for CCAA Protection

Perpetual Energy 2Q Avg Sales Production of 4,039 Boe/d, Down 38%; 2Q EPS C$0.05

Plaza Retail REIT 2Q Rev C$30.7M

SNDL 2Q Rev C$228.1M, Down 1.6%; Decrease Driven by Market Softness in Liquor Retail Segment; 2Q Oper Loss C$4.8M; 84% Improvement in Oper Loss Driven by Margin Expansion, Lower Expenses

Source Energy Services 2Q EPS C$0.26; 2Q Sales C$176.4M

TVA Group 2Q Loss/Shr C$0.07; 2Q Loss C$2.91M; 2Q Rev C$144M


Expected Major Events for Friday

06:45/FRA: Jun Industrial production index

08:00/ITA: Jun Industrial Production

09:00/ITA: Jun Retail Sales

12:30/US: Jul U.S. Employment Report

14:00/US: Jun Manufacturers' Shipments, Inventories & Orders (M3)

All times in GMT. Powered by Kantar Media and Dow Jones.


Expected Earnings for Friday

AES Corp (AES) is expected to report $1.84 for 2Q.

AdvanSix (ASIX) is expected to report $1.11 for 2Q.

Arbor Realty Trust Inc (ABR) is expected to report $0.34 for 2Q.

ArcBest Corp (ARCB) is expected to report $2.00 for 2Q.

Ares Management Corp (ARES) is expected to report $0.99 for 2Q.

Asbury Automotive Group Inc (ABG) is expected to report $7.40 for 2Q.

Atco Ltd - Class I (ACO.X.T) is expected to report $0.99 for 2Q.

Bogota Financial Corp (BSBK) is expected to report for 2Q.

Brookfield Renewable Corp (BEPC,BEPC.T) is expected to report $-0.07 for 2Q.

Brookfield Renewable Partners LP (BEP,BEP.UN.T) is expected to report $-0.33 for 2Q.

Burke Herbert Financial Services Corp (BHRB) is expected to report $1.42 for 2Q.

Canadian Utilities Ltd - Class A (CDUAF,CU.T) is expected to report $0.66 for 2Q.

Cboe Global Markets Inc (CBOE) is expected to report $1.99 for 2Q.

Chart Industries Inc (GTLS) is expected to report $2.16 for 2Q.

Chatham Lodging Trust (CLDT) is expected to report $0.05 for 2Q.

Chevron Corp (CVX) is expected to report $2.91 for 2Q.

Church & Dwight Co (CHD) is expected to report $0.84 for 2Q.

(MORE TO FOLLOW) Dow Jones Newswires

08-02-24 0629ET